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Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Ilya Spivak, Head Strategist, APAC

Talking Points

Crude oil and copper prices are inching lower in early European trade. The move appears to reflect profit-taking rather than a discrete catalyst, with investors taking advantage of a lull in high-profile scheduled event risk to take profits ahead of the week-end. S&P 500 stock index futures are firmly in negative territory, hinting more of the same is likely ahead as Wall Street comes online.

Gold and silver are little changed, mirroring the standstill in the US Dollar. The greenback edged higher overnight as risk aversion stoked haven demand for the benchmark currency but positioning has largely returned to a neutral setting as lingering QE3 hopes cap the upside amid de-basement fears.

Eurozone finance ministers are scheduled to hold a conference call paving the way for the disbursement of the first €30 billion in Spain’s bank sector bailout. The outing offers nothing new in terms of policy and seems likely to pass with little fanfare, though there remains a possibility for knee-jerk volatility if any particularly attention-grabbing headlines emerge.

On the earnings front, bellwether names like Ingersoll-Rand and General Electric are in focus, with traders continuing to monitor guidance amid worries of a deepening global slowdown into the second half of the year.

WTI Crude Oil (NY Close): $92.66 // +2.79 // +3.10%

Prices took out resistance at 91.84, the 50% Fibonacci retracement level, to expose the 61.8% barrier at 95.29. A break above this boundary targets the 76.4% Fib at 99.55 and the psychologically significant 100.00 figure. The 91.84 level has been recast as near-term support, with a drop back below that targeting the 38.2% retracement at 88.40.

Crude_Oil_Vulnerable_to_Pullback_Gold_Treading_Water_into_Week-End_body_Picture_3.png, Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Gold (NY Close): $1581.43 // +7.90 // +0.50%

Prices continue to consolidate below resistance at 1588.90. A break higher exposes falling trend line resistance now at 1608.14. Near-term support lines up at 1570.83, with breach below that targeting 1558.77 and the 1522.50-32.45 area.

Crude_Oil_Vulnerable_to_Pullback_Gold_Treading_Water_into_Week-End_body_Picture_4.png, Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Daily Chart - Created Using FXCM Marketscope 2.0

Spot Silver (NY Close): $27.25 // +0.06 // +0.22%

Prices continue to tread water above support is at 26.75. A break below that exposes the multi-month triple bottom at 26.05. Trend line resistance is now at 27.60, with a breach above that exposing the July 3 high at 28.44.

Crude_Oil_Vulnerable_to_Pullback_Gold_Treading_Water_into_Week-End_body_Picture_5.png, Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Daily Chart - Created Using FXCM Marketscope 2.0

COMEX E-Mini Copper (NY Close): $3.534 // +0.018 // +0.52%

Prices are pulling back from resistance at 3.535, with sellers seeing initial support at 3.445 marked by the 14.6% Fibonacci expansion. This barrier is reinforced by the bottom of a rising channel set from the June 22 low, now at 3.459.A break downward initially targets the 23.6% Fib at 3.378.

Crude_Oil_Vulnerable_to_Pullback_Gold_Treading_Water_into_Week-End_body_Picture_6.png, Crude Oil Vulnerable to Pullback, Gold Treading Water into Week-End

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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